ThyssenKrupp AG said Friday it would sell its troubled Alabama steel plant to a joint venture formed by ArcelorMittal and Nippon Steel & Sumitomo Metal Corp. for $1.55 billion, a move that is likely to help prop up U.S. prices.

The sale price represents a steep discount from the $5 billion Thyssen spent to build the steel-rolling plant, which opened three years ago in Calvert, Ala. The German company has been importing raw steel from Brazil and finishing it at the Alabama plant, and then selling it to auto makers in...